SNB chief denies wrongdoing over dollar deals

AP News
Posted: Jan 05, 2012 11:16 AM
SNB chief denies wrongdoing over dollar deals

The Swiss National Bank chief denied any wrongdoing Thursday and said he had no plans to resign over private currency deals that produced hefty profits for his family.

Breaking his silence to counter a national uproar, Philipp Hildebrand said had acted according to the central bank's internal rules in the U.S. dollar swaps, which came as he was spearheading efforts to lower the value of the Swiss franc.

"I am not aware of having committed any legal error," Hildebrand told reporters at the SNB's headquarters in Zurich. "But I understand that the public is also asking moral questions."

The 48-year-old has come under pressure to reveal all details of the dollar deals and avert harm to Switzerland's small but powerful central bank.

Hildebrand said he understood that the dollar deals totaling more than $2 million _ some of which he said were conducted by his wife _ could be misinterpreted and damage his reputation. But he insisted that he would stay on as president as long as he had the support of the SNB's board and Swiss authorities.

"Resignation is not an issue for me," he said.

Hildebrand lashed out at those who had revealed the dollars deals by leaking details of his private account at Bank Sarasin. The Basel-based bank said it has fired an IT support employee who handed the files to a lawyer close to the nationalist Swiss People's Party.

Hildebrand said he would consult with his lawyer on whether to take legal steps against those involved in leaking his files.

The public furor over Hildebrand's private deals marks a rare misstep for the former champion swimmer. As recently as last week, one Swiss newspaper described him as the "rock star of the euro crisis" for keeping a cool head while Switzerland's neighbors trembled amid the turmoil affecting the euro currency.

It was Hildebrand who led the Swiss National Bank's efforts to vent steam out of Switzerland's overheating currency by setting the minimum value of the euro at 1.20 Swiss francs on Sept. 6.

When details of Hildebrand's account at Bank Sarasin surfaced late last year, the Swiss central bank declared that its chief had done no wrong and closed the case.

But the recent drip-drip of claims _ some of them pitting Hildebrand's word against those of a magazine hostile to his leadership of the bank _ reignited debate over the future of Switzerland's top banker.

Much of Hildebrand's defense rests on his claim that it was his wife Kashya, a former currency trader now running an art gallery in Zurich, who bought more than half a million U.S. dollars on Aug. 15 without telling her husband.

Kashya Hildebrand, a Pakistan-born U.S. citizen, told Swiss television Tuesday that she invested in the dollar "because it was at a record low and almost laughably cheap."

Hildebrand told reporters Thursday that his wife wasn't aware that the central bank would two days later increase the liquidity of the franc, thereby lifting the value of the dollar.

Critics say the central bank chief and his wife acted at best naively.

"That those close to the central bank chief are making currency deals is an absolute no-go," Christoph Moergeli, a senior figure in the Swiss People's Party, told Swiss TV. "You don't even need to put that in writing."

Hildebrand said the only charge he would level against himself is that he failed to reverse the Aug. 15 dollar purchase made by his wife.

Asked why he didn't do so, he responded: "Let's just say my wife has a strong personality."